Bank On Track To Book Rs 16,000 Crore-Plus Profit In FY26, Says PNB MD
The net profit of the bank fell 48% to Rs 1,675 crore due to significant rise in tax expenses during the first quarter to Rs 5,083 crore as the bank switched to the new tax regime.
(Photo source: Mariyam Usmani/NDTV Profit)
Unfazed by 48% decline in net profit in the first quarter, Punjab National Bank MD and CEO Ashok Chandra has said the bank can still achieve the level of profit earned in the last financial year helped by about Rs 2,100 crore savings due to migration to the new tax regime. The country's second-biggest public sector lender had earned a net profit of Rs 16,630 crore in FY25.
The net profit of the bank fell 48% to Rs 1,675 crore due to significant rise in tax expenses during the first quarter to Rs 5,083 crore as the bank switched to the new tax regime.
"We thought that this is the right time for us to move from the old tax regime to new tax because the old tax rate is 34.94% and new tax is 25.16%. So, almost 10% difference is there." he told PTI in an interview.
"So, when you are migrating from old tax to new tax, you need to rework DTA calculation, because it was calculated at 34.9% so when we are recalculating that DTA, that hit has come to the extent of Rs 3,424 crore." he said.
Going forward, he said, the bank is going to save 10% of the operating profit every quarter on account of the migration to the new tax regime.
"So, assuming that the Rs 7,000 crore operating profit is going to happen in every quarter, I think Rs 700 crore net accretion will happen on account of migration itself to the net profit. It is going to give us 16 basis point improvement in the bank's return on assets,' he said.
Asked if the bank will be able to surpass the profit earned in the last financial year, Chandra said it will remain at the same level as in the previous year as migration to the new regime would lead to saving of about Rs 700 crore every quarter from now on.
Besides, he said, income from treasury operations other than interest income is going to boost operating profit.
He further said PNB is well poised to touch the milestone of Rs 30 lakh crore total business by the end of the current financial year and the country's second biggest lender has the right strategy in place to achieve it.
Total business of PNB rose 11.6% to Rs 27.19 crore at the end of the first quarter of the current financial year. PNB is closely followed by Bank of Baroda with total business of Rs 26.43 lakh crore while Canara Bank at Rs 25.64 lakh crore at the end of June 30, 2025.
"We have a target of Rs 29.56 lakh crore for the current financial year. We may do better than our target and can touch Rs 30 lakh crore by March next year but let me add that we are very mindful that whatever the top line we are going to build, it should add profit to my bank." he said.
Chandra emphasised that PNB is very conscious of the operating profit and even in the first quarter itself the bank has recorded the highest-ever operating profit of Rs 7,081 crore.
"Whether it is, deposit mobilisation or the corporate loan book, everything should add to the bottom line of the bank. So that is the reason now, bulk deposits have been brought down and the corporate deposits have curtailed to a great extent." he said.
